On May 1, 20X1, Palawan Co. anticipated the purchase of 70,000 units of merchandise from a foreign vendor. The purchase would probably occur on September 25, 20X1 and require the payment of 1,250,000 foreign currencies (FC). On May 1, 20X1, the company purchased a call of option to buy 1,250,000 FC at strike price of 1FC=P0.47. An option premium of P 14,000 was paid. Changes in the value of the option will be excluded from the assessment of hedge effectiveness. For the year 20X1, the following rates were as follows:

	May 1	May 31	June 30	September 25
Spot rate	P0.45	P 0.49	P 0.51	P 0.52
Fair value of call option	?	P29,500	P 52,000	?

The foreign exchange gain (loss) on option contract in (1) other comprehensive income and (2) earnings on June 30: